KUALA LUMPUR: Southeast Asian markets are rethinking their approach to sustainable growth amid global economic uncertainties. A newly published report, the 6th edition of Southeast Asia’s Green Economy by Bain & Company, GenZero, Google, Standard Chartered, and Temasek, highlights the importance of a systems-based strategy to unlock growth while balancing environmental impact.
The report suggests that Southeast Asia’s green economy should be seen as an interconnected system, identifying systemic barriers that hinder progress and proposing scalable, high-impact solutions. Implementing these changes could potentially generate up to USD 120 billion in GDP growth, create 900,000 jobs, and reduce emissions by up to 50% by 2030.
Turning Challenges into Opportunities
Dale Hardcastle, Co-Director of Bain & Company’s Global Sustainability Innovation Center, noted that Southeast Asia has the potential to accelerate its green economy by focusing on scalable systems-level solutions. “By focusing on scalable, high-impact systems-level solutions, Southeast Asia can rewrite the green economy playbook and turn current challenges into opportunities,” he said.
Three Key Systems-Level Solutions
The report highlights three crucial systems-level solutions:
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Sustainable Bioeconomy: Improving agricultural productivity, implementing nature-based solutions, and reforming supply chains could help reduce emissions and create economic value.
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Next-Gen Grid Development: Expanding and modernising the domestic grid with renewable integration and cross-border connections could lower decarbonisation costs by 11% by 2050.
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Electric Vehicle (EV) Ecosystem: Scaling EV adoption and local production is essential for maintaining the region’s manufacturing competitiveness. Green corridors could facilitate commercial fleet electrification.
Enabling Solutions for Success
The report also highlights three enabling solutions to maximise impact:
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Climate and Transition Finance: Despite growth, there remains a funding gap of USD 50 billion. Blended finance and public-private partnerships are critical for progress.
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Carbon Markets: Enhancing regulatory frameworks and creating robust credit systems are necessary to boost investor confidence and meet climate targets.
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Green AI: Leveraging AI to optimise energy consumption in data centres and high-emission sectors could reduce emissions by 3-5%.
Spencer Low, Head of Regional Sustainability at Google, stressed the importance of managing AI’s environmental footprint. “We need to responsibly manage the environmental footprint of AI and data centres through model optimisation, efficient infrastructure, and emissions reductions,” he said.
Green Investments on the Rise
Private green investments in SEA-6 rose by 43% to USD 8 billion in 2024, with solar energy investments doubling and waste management projects increasing by 60%. Foreign investments from APAC have doubled, while domestic investments fell by 40%.
Mak Joon Nien, CEO of Standard Chartered Malaysia, emphasised the need for increased capital flow. “The transition to a low-carbon economy is more compelling and crucial than ever,” he stated.
Collaboration Is Key
The report calls for increased collaboration between Southeast Asia and the broader APAC region to build a resilient green economy. Joint investments, shared technologies, and coordinated policies can help achieve the dual goals of economic growth and emission reduction.
The systems-based approach is not just a strategy for reducing emissions but a fundamental shift towards sustainable economic growth that positions Southeast Asia as a global leader in the green economy.
